U.S. Secretary of State Hillary Clinton Friday welcomed a draft agreement between China and ASEAN, the Association of Southeast Asian Nations, aimed at defusing tensions over disputed waters of the South China Sea. Clinton met her Chinese counterpart, Foreign Minister Yang Jiechi, on the sidelines of the ASEAN regional forum in Bali.

The draft agreement committing the rival claimants to a peaceful resolution of the South China Sea dispute is vaguely worded. But U.S. officials are expressing relief over the accord, which they say should ease tensions between China and several ASEAN member states including U.S. defense treaty ally, the Philippines.

Secretary of State Hillary Clinton, beginning a round of consultations on the sidelines of the ASEAN forum, welcomed the agreement at a bilateral meeting with her Chinese counterpart, a meeting she said would also focus on the Korean nuclear issue.

"I want to commend China and ASEAN for working so closely together to include implementation guidelines for the declaration of conduct in the South China Sea, and of course we will discuss our mutual desire for peace and stability on the Korean peninsula,” said Clinton.

China has been locked in an increasingly bitter dispute with four ASEAN members - the Philippines, Malaysia, Brunei and Vietnam - along with Taiwan over the South China sea and its vital shipping lanes and potential energy resources.

Seated across the table from Clinton, Foreign Minister Yang said Beijing, which has made by far the largest claim in the region, wants to see a peaceful settlement.

“I do believe that the conclusion of the guidelines is of great significance, and it will go a long way to maintaining the peace and stability and good-neighborliness in this region. And this will also provide favorable conditions for the proper handling and the settlement of the disputes among the claimants,” Yang said.

The guidelines were also welcomed earlier by Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell, who said the accord - though preliminary - has already improved the political climate in the region.

“We welcome this. It’s an important first step," said Campbell. "I think it has lowered tensions. It has improved atmospherics. But clearly it is just that, a first step. And we are going to need to see some follow-on interactions between China and ASEAN.”

A senior State Department official who spoke to reporters welcomed reported diplomatic contacts on the margins of the ASEAN forum between North and South Korea.

The United States Thursday vigorously denied Japanese press reports of a possible U.S.-North Korean meeting here and the senior official said such a meeting was “unthinkable” in the absence of substantial progress in the troubled north-south Korean relationship.

The senior official said Assistant Secretary Campbell met in Bali earlier this week with Burmese Foreign Minister Wunna Maung Lwin and laid out clear guidelines on what the new nominally-civilian Burmese government needs to do to improve relations with Washington.

The official said the results of outreach by the Obama administration to the former military government were “quite disappointing” and said the new authorities need to take “decisively different” action if Burma is to end its political isolation.

He said Clinton, in a statement at the ASEAN forum Saturday, would lay out terms for better relations, including the release of Burmese political prisoners, dialogue between the new government and opposition leader Aung San Suu Kyi, an end to military action against ethnic minorities, and a halt to any Burmese trade with North Korean banned by U.N. resolutions.

He said despite some early “glimmers of possibility” from the new leadership, U.S. officials have not seen anything consequential and that “time is running out” for improved ties.

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